Archive for November, 2012

Getting Technical: Weekend Update

Courtesy of Doug Short.

Here’s the latest weekend update from Serge Perreault, a Chartered Professional Accountant and market technician located near Montreal, Canada. Serge has been following the U.S. market in a series of weekly charts. Here is his update on the S&P 500.

The S&P 500 continued its ascension, on improving momentum and on 3% above-average volume but, the index and its ROC momentum indicator are now testing important resistances.



Note: For newcomers to technical analysis, here are brief explanations for the two key indicators that Serge features:

  • ROC (Price Rate of Change)
  • RSI (Relative Strength Index)

(c) Serge Perreault CPA Inc.





Gold And The Potential Dollar Endgame Part 2: Paper Gold, What Is It Good For?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored by Dan Flynn and Joe Yasinski of Gold Bullion International,

Part 2 of 3: “Paper Gold, what is it really good for?”

In our first installment of this series we explored the concept of stock to flow in the gold markets being the key driver of supply/demand dynamics, and ultimately its price. To briefly summarize the STF concept, the “stock” of existing gold is the total amount ever mined and the “flow” is the amount of physical gold available for purchase on any given day. Obviously the more flow, the more for sale and presumably, the lower the price. Today we are going to explore the paper markets and, importantly, to what degree they distort upwardly the “flow” of the physical gold market. We believe the very existence of paper gold creates the illusion of physical gold flow that does not and physically cannot exist. After all, if flow determines price – and if paper flow simulates physical metal movement to a degree much larger than is possible – doesn’t it then suggest that paper flow creates an artificially low price? If the physical metal does not actually flow along with paper representations of flow, then isn’t it true that the current stock to flow ratio may already be much higher than previously imagined?

When we talk about “paper” markets, we are broadly referring to derivative markets; forwards, swaps, and in the case of gold, unallocated gold accounts as well. Derivative markets for commodities were developed to smooth the wild price swings caused by supply gluts or unexpected shortages. The first modern exchange for rice dates back early 18th century Japan. By 1848, the Chicago Board of Trade was formed, originally clearing trade of forward contracts on corn. Consumed commodities tend to exhibit tight supply/demand dynamics so it is easy to understand the necessity for such ‘paper’ markets for legitimate hedging purposes. As discussed in part one, gold is not consumed and given the existing stock and annual mine production – there is an approximate 65 year ‘overhang’ of new mining supply. Can you imagine the need of Cargill to hedge the cost of corn if a non-perishable, 6 decade supply sat in their warehouse? With a relatively massive existing stock of gold, there is no potential supply shock to hedge against…
continue reading

Fun and Games and Obvious Manipulation

Fun and Games and Obvious Manipulation

Courtesy of 

Friday's close was the most obviously, nakedly manipulated bullshit close I've ever seen. I have no idea who is behind it but this is not what healthy, well-participated-in markets do. There are too many real players to allow for this kind of thing to be able to happen in a real market. This market we have is shady as hell. I wouldn't even comment on something like the below chart if it were a one-off, but honestly, this feels like it's all the time.

The market is devoid of width and depth, you can jerk it around pretty easily – especially if backed by an institution that borrows free money.  And in the meantime, the powers that be need it to close higher every week to prevent outflows and redemptions. Tyler's take on the close is here, btw:  (Zero Hedge)

That's the way they want it. They get it.

I feel bad for investors and traders who haven't been in this game prior to 2008, when it was real and the mid-day action mattered. Now the whole trading day is irrelevant because the 19 people still left get to close this motherfucker at whatever price they want. On top of which, almost all of the gains this year have come courtesy of gaps in the morning. The whole trading day has just been invalidated at this point.

I don't know…whatever.

Read today's Takeaway at Investment News and have a great weekend!

A Graveyard for Tacticians

A Graveyard for Tacticians

Courtesy of 

Whatever the market historians say about the 2012 stock market years from now, they will certainly have to at least mention how difficult it was for those who practice tactical asset allocation. Not just difficult, actually it was a graveyard.

    I'm going to show you why:

    In 2012, there were very few ways to win and lots of ways to lose if you were doing any kind of market timing at all.

    First of all, you had to have come into the year fully-invested, both barrels loaded.  You also had to have been at least equal-weighted to Apple. Thus, if you had a value-bent (versus a growth-bent) to your allocation, you got smoked. The year's gains are front-end loaded, which means if you lagged that January to April run, you almost never had a chance to catch up.

    Second, there were two major fakeouts for those employing a 200-day or ten-month moving average as a buy/sell signal. The Spring sell-off, driven by Europe, culminated in one of the nastiest bull reversals I've ever seen. You got taken out of stocks only to watch a V-shaped snapback humiliate you within hours - not days but hours!  It was insane.

    By September, the performance chase had pushed the market to a new year high, only to suck everyone back in right before the fiscal cliff / global recession zeitgeist started to make itself felt again.  A horrible earnings season in which "uncertainly" punctuated every conversation had ended with a second fakeout for the tacticians to impale themselves on. Just when it looked as though we were finally going to get a real correction and stocks had broken below the 200-day, the unthinkable happened: The light-volume and shortened holiday week saw one of the most incendiary stock market runs of all time.  In three-and-a-half days the S&P had gained back almost the entire correction in a run that seemingly included no one. Apple alone had ripped from 505 to 590 within what seemed like seconds! Forgetaboutit!

    Once again, trend-followers and timers got smoked before they even knew what had happened. In the time it takes you to open the Yahoo Finance app on your iPad, the reversal had beclowned all but the buy-and-holders.

    Many years from now, people will see the 2012 stock market's 15% return in…
    continue reading

    China PMI Rises But Misses Expectations For Fifth Month In A Row As Uncertainty Prevails

    Courtesy of ZeroHedge. View original post here.

    Submitted by Tyler Durden.

    China’s Manufacturing PMI missed expectations, coming in at 50.6 relative to a slightly expansionary 50.8 expectation, and up down from the 50.2 prior. This is the fifth month in a row of missed expectations but it has now risen for three months in a row, to the highest level in 8 months; but has now hovered within 0.6pts of the expansion/contraction knife-edge for six months. The PBOC’s index remains above (more positive) than the HSBC version for the 20th month in the last 21 (which remains in the contractionary sub-50 range it has been in for 16 months). With the Shanghai Composite testing Jan 09 lows and the ongoing Reverse Repo delicate bank pumpathon, the relative stabilization in Services and Manufacturing PMIs is confirmed by this evening’s data and provides hope for those bidding H-Shares to 16-month highs. Interestingly for all those who remain shocked at the divergence between the Hang-Seng and the Shanghai Composite, it seems clear that A-Shares investors remain skeptical of the PMI-based stabilization of macro and prefer to trust the weaker (and harder to tweak) Industrial Output data.

    Employment and Input Prices sub-indices fell. New Orders rose modestly but it seems like this month’s pickup was as much about picking up the slack from last month’s backlog than new business.


    5 months in a row of missed expectations – but 3 months of expansion…


    but remains above the HSBC index…


    SHCOMP vs Industrial Production vs Hang Seng


    Charts: Bloomberg


    Thought for the night… YUM vs SHCOMP…

    Study: American Households Hit 43-Year Low In Net Worth

    WASHINGTON (CBS DC) – The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

    According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.

    According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The “less than $10,000? figure includes the numerous households that have no assets at all, or “negative assets,” which is otherwise known as “debt.”

    Keep reading: Study: American Households Hit 43-Year Low In Net Worth « CBS DC.

    Bill Ackman: “Everything You Wanted To Know About Finance (Except JCP) In Under An Hour”

    Courtesy of ZeroHedge. View original post here.

    Submitted by Tyler Durden.

    Whether you believe he is a one-hit-wonder or an investing wunder-kind, the following 44 minute clip from the activist investor (who is early, not wrong, on JCP, right?) provides investors with some indepth insights into what it takes to finance and grow a successful business and ‘how to make sound investments that will lead to a cash-comfy retirement.’ Of course, there are those who can and “do” grow a business, and those who “invest”… often times with less than stellar (ahem PSIV) results.


    00:00:00 introduction
    00:00:57 lemonade stand
    00:03:14 fixed asset and inventory
    00:04:30 assumptions
    00:05:54 growing
    00:08:12 cashflow
    00:09:13 value
    00:11:16 debt and equity
    00:13:11 risk
    00:14:59 rising capital
    00:17:42 valuation
    00:23:56 compound interest
    00:25:37 advice
    00:30:33 barriers for entry
    00:33:34 when to invest
    00:35:49 withstand volatility
    00:37:13 mutual funds
    00:41:24 ending


    S&P 500 Snapshot: Friday’s Flat Finish

    Courtesy of Doug Short.

    The S&P 500 started the day with no sense of direction. But an hour into the day we saw a modest selloff to the intraday low, off 0.31%, by late morning. A rally in the final hour took the index to its intraday high, up 0.21%, two minutes before the close. But last-minute selling gave us essentially a flat finish, up 0.02% for the day. For the week the index gained 0.50%, and the month of November finished with a tiny gain of 0.28%.

    Here is a five-minute look at today’s action.

    Here is a two-hour chart for the complete month of November. We see the post-election selloff followed by a rally initially triggered by optimistic comments to the press by Representative Boehner and others about the resolving the Fiscal Cliff.

    The S&P 500 is now up 12.61% for 2012 but 3.38% below the interim closing high of September 14th.

    From a longer-term perspective, the index is 109.3% above the March 2009 closing low and 9.5% below the nominal all-time high of October 2007.





    For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.





    Ultimate Fiscal Cliff Cheat Sheet Infographic

    Courtesy of ZeroHedge. View original post here.

    Submitted by Tyler Durden.

    The Fiscal Cliff is the name given for the 2013 increase of Federal Government taxes and budget cuts. The Bush-era tax cuts expire and the 2013 "Budget Control Act" kicks in, among other budget cuts & new taxes. The Fiscal Cliff is set to reduce the 2013 US Government budget deficit by roughly half; will remove $607 Billion from economy (GDP), resulting in 4% drop, pushing it back into recession; it can NOT be avoided. It must happen to fix the budget deficit; any delay must be paid for later; it will NOT reduce the US debt, only slow down the growth. The Fiscal Cliff's (new taxes and budget cuts) size and impact are visualized below in physical $100 bills.



    New Taxes…

    Beginning 2013, Americans are to pay more in taxes.

    Bush era tax cuts, FICA 2% payroll tax cuts & other tax provisions will expire, Obamacare taxes will show up – this amounts for $400 Billion in new taxes.

    Each truck holds $2 Billion, each line is 1.36 miles (7217 feet), for a total truck line length of 2.73 miles, worth $400 Billion.

    This is how it could look if taxes were paid physically, instead of electronically.

    $222.7 Billion Bonus: Corporate Tax Subsidies

    While the taxes are increasing significantly on American citizens, the largest corporations have enjoyed corporate tax loop-holes.

    280 of America's largest companies got $222.7 Billion in tax-breaks between 2008-10, while all of them remained profitable.

    67 of the 207 companies' paid effective three-year tax rate of less than 10 percent-- far from the 35% corporate tax code.


    Budget Cuts…

    The Fiscal Cliff will cut $207 Billion out of Government budget: $65 Billion in cuts will come from "Automatic Sequestration", a fancy name for automatic spending cuts that are the consequence of the "Super Committee" failing to come up with a plan to cut $1.5 Trillion over 10 years, which they had to do in order to avoid the "Automatic Sequestration".

    The sequestrations cuts will be divided equally between Defense and Non-Defense spending.

    $26 Billion in cuts will come from the Unemployment Benefit Extension expiring.

    $11 Billion in cuts will come from reduction in Medicare Payment Rates.

    $105 Billion will come from other spending reductions.


    Source: Demonocracy

    Business as Usual: The Next Fiscal Cliff

    Courtesy of Russ Winter of Winter Watch at Wall Street Examiner

    More on the fiscal cliff talks: The Presidente’s opening bid - delivered this afternoon by Tim Geithner – calls for a $1.6T tax increase, a $50B economic-stimulus program, and delivering to the WH the power to raise the federal debt limit without congressional approval.  The White House also wants the payroll tax credit to continue and a “permanent” increase in the debt limit.  Lastly, they want to extend emergency unemployment compensation.  It’s a “step backward,” says Mitch McConnell.

    The Presidente apparently graduated from the Fuck U School of Negotiations. Does a real ethical leader send a crook like Geithner to “open” with this particular irresponsible tract when Congress is adjourning on Dec. 14?  This is a deliberate attempt to obstruct the process.  I think we learned a lot about Obama’s second term here. No spending cuts and a token $42 bn from allowing expiration of the Bush tax cuts on those making over $250k is a spit in the ocean in comparison to the $3.6 trillion the government spends each year. Unless the GOP shows a little spine, deficits are going to blow sky high in 2013 and 2014. The overnight markets barely reacted to this. In fact I think the markets are hoping for business as usual, no austerity, no tax increases, just a phony facade. The Presidente is playing to extend all the items above to the next fiscal cliff.

    Bruce Krasting points out that the Sandy request of $80 bn from New York and New Jersey, exceeds the annual payments of disaster relief of $11bn. So the extra $69bn is going to require a special spending bill. Eric Cantor says this extra spending “will need to be properly considered,”  meaning something must offset, or the amounts could also be questioned.

    If this wasn’t enough a huge “Pineapple Express” is headed toward the West Coast, and will dump double digit rain over a very large region and in particular Northern California. This could require billions more in disaster relief.




    For additional analysis on this topic and related trades subscribe to Russ Winter's Actionable – risk free for 30 days.The subscription fee is $69 per quarter and helps support Russ.s work on your behalf. Click here for more information.

    Copyright © 2012 The Wall Street Examiner. All Rights Reserved. The…
    continue reading


    Phil's Favorites

    What scientists are doing to develop a vaccine for the new coronavirus


    What scientists are doing to develop a vaccine for the new coronavirus

    It is critical to learn more about SARS-CoV-2, including its source and why transmission appears to be more efficient than with previous coronaviruses. (Shutterstock)

    Courtesy of Marc-Antoine De La Vega, Université Laval

    With an increasing number of confirmed cases in China and 24 other countries, the COVID-19 epidemic caused by the novel coronavirus (now known as SARS-CoV-2) looks concerning to many. As of Feb. 19, the latest numbers listed 74,280 confirmed cases including 2,006 deaths. Four of these de...

    more from Ilene

    Biotech & Health

    What scientists are doing to develop a vaccine for the new coronavirus


    What scientists are doing to develop a vaccine for the new coronavirus

    It is critical to learn more about SARS-CoV-2, including its source and why transmission appears to be more efficient than with previous coronaviruses. (Shutterstock)

    Courtesy of Marc-Antoine De La Vega, Université Laval

    With an increasing number of confirmed cases in China and 24 other countries, the COVID-19 epidemic caused by the novel coronavirus (now known as SARS-CoV-2) looks concerning to many. As of Feb. 19, the latest numbers listed 74,280 confirmed cases including 2,006 deaths. Four of these de...

    more from Biotech

    Members' Corner

    Why do people believe con artists?


    Why do people believe con artists?

    Would you buy medicine from this man? Carol M. Highsmith/Wikimedia Commons

    Courtesy of Barry M. Mitnick, University of Pittsburgh

    What is real can seem pretty arbitrary. It’s easy to be fooled by misinformation disguised as news and deepfake videos showing people doing things they never did or said. Inaccurate information – even deliberately wrong informatio...

    more from Our Members

    Zero Hedge

    Fed's Bullard Fumbles After Being Asked "How A Quarter-Point Rate-Cut Will Cure The Flu?"

    Courtesy of ZeroHedge View original post here.

    St. Louis Fed President Jim Bullard was guest host on CNBC's Squawk Box this morning. Soon after sitting down, the indomitable Steve Liesman stunned everyone in the room when he dared to ask the all-knowing Bullard a simple question:

    "How would a quarter-point rate-cut 'cure the flu'?"

    Bullard's reaction was priceless...

    ...and in his fumb...

    more from Tyler

    The Technical Traders

    Gold Rallies As Fear Take Center Stage

    Courtesy of Technical Traders

    Gold has rallied extensively from the lows near $1560 over the past 2 weeks.  At first, this rally didn’t catch too much attention with traders, but now the rally has reached new highs above $1613 and may attempt a move above $1750 as metals continue to reflect the fear in the global markets.

    We’ve been warning our friends and followers of the real potential in precious metals for many months – actually since early 2018.  Our predictive modeling system suggests Gold will rally above $1650 very quickly, then possibly stall a bit before continuing higher to target the $1750 range.

    The one thing all skilled traders must consider is the longer-term fear that is build...

    more from Tech. Traders

    Kimble Charting Solutions

    Precious Metals Eyeing Breakout Despite US Dollar Strength

    Courtesy of Chris Kimble

    Gold and silver prices have been on the rise in early 2020 as investors turn to precious metals as geopolitical concerns and news of coronavirus hit the airwaves.

    The rally in gold has been impressive, with prices surging past $1600 this week (note silver is nearing $18.50).

    What’s been particularly impressive about the Gold rally is that it has unfolded despite strength in the US Dollar.

    In today’s chart, we look at the ratio of Gold to the US Dollar Index. As you can see, this ratio has traded in a rising channel over the past 4 years.

    The Gold/US Dollar ratio is currently attempting a breakout of this rising channel at (1).

    This would come on further ...

    more from Kimble C.S.

    Insider Scoop

    68 Stocks Moving In Friday's Mid-Day Session

    Courtesy of Benzinga

    • Trans World Entertainment Corporation (NASDAQ: TWMC) shares climbed 120.5% to $7.72 after the company disclosed that its subsidiary etailz entered into a deal with Encina for $25 million 3-year secured revolving credit facility.
    • Celldex Therapeutics, Inc. (NASDAQ: CLDX) fell 39.8% to $3.1744. Cantor Fitzgerald initiated coverage on Celldex Therapeutics with an Overweight rating and a $8 price target.
    • TSR, Inc. (NASDAQ: TSRI) gained 36.2% to $8.17.
    • ... more from Insider

    Digital Currencies

    Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year


    Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

    ‘We have you surrounded!’ Wit Olszewski

    Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

    When bitcoin was trading at the dizzying heights of almost US$2...

    more from Bitcoin


    What US companies are saying about coronavirus impact

    By Aman Jain. Originally published at ValueWalk.

    With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

    Q4 2019 hedge fund letters, conferences and more

    Coronavirus impact: many US companies unclear

    According to ...

    more from ValueWalk

    Chart School

    RTT browsing latest..

    Courtesy of Read the Ticker

    Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.

    Date Found: Tuesday, 01 October 2019, 02:18:22 AM

    Click for popup. Clear your browser cache if image is not showing.

    Comment: Wall of worry, or cliff of despair!

    Date Found: Tuesday, 01 October 2019, 06:54:30 AM

    Click for popup. Clear your browser cache if image is not showing.

    Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...

    more from Chart School

    Lee's Free Thinking

    Why Blaming the Repo Market is Like Blaming the Australian Bush Fires


    Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

    Courtesy of  

    The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

    Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:


    The ‘experts’ I hear from keep saying that once 300B more in reserves have ...

    more from Lee

    Mapping The Market

    How IPOs Are Priced

    Via Jean Luc 

    Funny but probably true:


    more from M.T.M.


    Free eBook - "My Top Strategies for 2017"



    Here's a free ebook for you to check out! 

    Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

    In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

    This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

    Some other great content in this free eBook includes:


    ·       How 2017 Will Affect Oil, the US Dollar and the European Union


    more from Promotions

    About Phil:

    Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

    Learn more About Phil >>

    As Seen On:

    About Ilene:

    Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.